Hospitality growth outlook falls to two year low

Growth predictions for the last quarter of 2022 have fallen 5%, from 31% to 26%.

By contrast, 27% of small businesses fear the sector will contract over the next three months, up from 16% in the pervious quarter. 

These figures have gradually risen quarter-on-quarter through 2022 and the percentage of small businesses fearing for the future is now at its highest level since January 2021, according to Novuna, with 10% of firms predicting they will struggle to survive until the end of the year.

Additionally, for the second time this year the proportion of hospitality businesses anticipating a period of decline was higher than those predicting growth.

"We are all very aware of the seismic economic challenges that everyone is facing as we head into autumn and winter months," says Jo Morris, head of insight at Novuna Business Finance.

"We were not surprised to see a dip in the proportion of small businesses that are predicting growth in the run-up to Christmas, although the fall was less severe than may have been expected - given the scale of economic volatility and the impact of price rises and inflation on running costs and the supply chain."

Spiralling costs have forced chefs and restaurateurs across the country to reassess operations, with a several closing sites either for the winter or, in some cases, permanently.

Last month, Oxfordshire restaurant Crockers Henley permanently closed its doors​​, with owner Luke Garnsworthy blaming the 'bleak economic outlook'.

Meanwhile, Michael Caines's waterside restaurant and bar The Harbourside Refuge in Porthleven, Cornwall, is to close through the winter​​ in a bid to weather the economic storm​​ currently battering the sector. And in Bristol, Larkin Cen's Woky Ko group has permanently closed its restaurants on Queens Road and at the city's Cargo development​​​​, with the chef citing rising price pressures.